UCITA in court and doing well

When the Uniform Computer Information Transactions Act (UCITA) was being debated nationally in the late 1990’s and early 2000’s, it became part of a wildly intense debate about the nature of contract law that ultimately led to the rejection of two misguided efforts to revise ancient UCC Article 2. UCITA barely survived vitriolic and often dishonest attacks. It was enacted in two commercially major states and the concepts it set out have become mainstream judicial analyses, referred to in a number of legal treatises.

In my opinion, the true test of a contract law statute lies in how little litigation it creates. Under that standard, UCITA has been a true success in Maryland and Virginia. Ten years after enactment, it is only now that a small trickle of cases under UCITA have begun to appear.

One of the false arguments brought by opponents against UCITA was that it tipped the scale too strongly in favor of vendors and online providers wanting to impose terms. The Court of Appeals in Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) refuted that claim, commenting the UCITA enacted contract formation rules consistent with common law, but placed them in a codified form. A similar observation was made by a neutral scholar, Bob Hillman. See Robert A. Hillman & Jeffrey J. Rachlinski, Standard-Form Contracting in the Electronic Age, 77 N.Y.U. L.Rev. 429, 491 (2002) (“[W]e contend that UCITA maintains the contextual, balanced approach to standard terms that can be found in the paper world.”).

So, the first time a court was asked in Virginia to apply UCITA to a contract formation issue, what happened? The court applied UCITA and reached the conclusion that the particular online provider did not do enough to create a contractual obligation with respect to users of its site.

The case was Cvent v. Eventbrite, 2010 WL 3732183 (ED Va. 2010). The case involved scraping of data from the Cvent site by Eventbrite. The data concerned venues for events. There were a number of claims, including a claim for violation of computer crime law. But also a claim for breach of contract. The court said:

Cvent's breach of contract claim fails to state an entitlement to legal relief because Cvent has not alleged sufficient facts to support a plausible allegation that a contract existed between Cvent and Eventbrite. … Cvent relies exclusively on its “Terms of Use,” which are displayed on secondary pages of its website and can be accessed only through one of several dozen small links at the bottom of the first page. … Moreover, users of event's website are not required to click on that link, nor are they required to read or assent to the Terms of Use in order to use the website or access any of its content. This case is therefore not a “clickwrap” case, but rather falls into a category of alleged contracts that many courts have termed “browsewrap agreements.” … Most courts which have considered the issue … have held that in order to state a plausible claim for relief based upon a browsewrap agreement, the website user must have had actual or constructive knowledge of the site's terms and conditions, and have manifested assent to them. …

UCITA provides a breach of contract claim for violation of electronic Terms of Use, if a person (1) has an “opportunity to review” the terms and (2) engages in statements or conduct indicating, or leading one to infer, the person's “assent” to the terms. Individuals, however, are only deemed to have had an “opportunity to review” a term if the term is “available in a manner that ought to call it to the attention of a reasonable person,” or if the website “disclose[s] the availability of the standard terms in a prominent place on the site” and “does not take affirmative acts to prevent printing or storage of the standard terms for archival or review purposes.”

In its complaint, plaintiff makes bare assertions that its Terms of Use were prominently displayed on its website, that defendants had an “opportunity to review” the Terms of Use pursuant to and that defendants manifested assent to those terms merely by accessing Cvent's venue location database. However, those conclusory allegations are flatly contradicted by the screenshots of Cvent's website and are plainly insufficient …

The statute fits smoothly with the common law and the result underscores, once again, the basic premise that if a contract is desired, the process must be on that ensures that reasonable notice and reasonable opportunity for assent exist.